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PENSIONS - The European Court has today (19 December) provided its ruling on the level of compensation to be provided to individuals who do not receive all of their occupational pension due to the sponsoring employer of their scheme going insolvent.

The European Court ruled that the current EU legal requirement that individuals should be entitled to at least 50% of their benefits can continue – provided the person is not left at risk of an EU poverty measure equivalent to about £11,142 per year (Eurostat - 2018).

In the UK, the Pensions Protection Fund, which has 400,000 members, provides 100% benefits to people who are already drawing their pension at the time of the employer going insolvent, and 90% to those who are not yet retired. Prior to the ruling today, many people had thought it might result in the PPF having to pay out 100% of benefits in all cases and that this might result in enormous new costs for employers and, possibly, for the Government.

It is not clear how it will be possible to assess whether a person who is in the PPF is in receipt of total income (state pension, pensions, other income) above the new minimum level.

Today’s case focussed on Gunther Bauer, a former worker of a now defunct German company, could fundamentally alter the UK’s only Government-backed pensions safety net. With the ruling now given, the judgement will take affect across EU member states. In light of Brexit, it is not clear to what extent this ruling will apply in the UK.

Nigel Peaple, Director of Policy and Research, PLSA, said: “Today’s judgement by the European Court provides a pragmatic solution to the question of how to ensure a minimum level of protection to savers in a company pension where the scheme is underfunded and the sponsoring employer goes insolvent. Under the ruling, if a saver relies on a pension’s lifeboat for their retirement income they must receive at least 50% of promised benefits on condition it ensures they have at least a minimum income as defined by an EU measure of poverty. If their income falls below this minimum level, a higher percentage must be paid.

“The UK lifeboat, the PPF, provides between 90% and 100% of former pension entitlements and, given that a full UK State Pension ensures people have around £8,800 of income per year, it seems likely that many people in the PPF will be above the minimum income allowed. However, detailed analysis will need to be undertaken by the PPF before we can be certain about the impact of the judgement on the liabilities of the PPF and on UK pensions. That impact is likely to have two elements. Firstly, a substantial administrative challenge for PPF on how to assess whether individuals are above the poverty threshold and, secondly, there may also be shortfall in the funding of the PPF which could result in higher levies for pension schemes. Compared to expectations prior to the ruling, the administrative challenge is greater and the funding challenge probably much less.”

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ECONOMY – Retail sales are flagging.

“Retail sales fell in the latest three months, which is the first decline seen since April 2018. All main sectors saw their sales fall with the exception of food stores.

“The spending dip in November was the fourth consecutive month to see no growth.”

In the three months to November 2019, the quantity bought in retail sales decreased by 0.4% when compared with the previous three months; this is the first decline since April 2018.

The quantity bought in November 2019 fell by 0.6% when compared with the previous month, with only household goods stores reporting growth.

Year-on-year growth in the quantity bought increased by 1.0% in November 2019; this is the lowest growth since April 2018, owing to a decline of 1.1% in non-food stores.

In 2019, the official Black Friday was on 29 November and outside our November reporting period, which covers four weeks from 27 October to 23 November; our seasonally adjusted estimates account for this shift in timing.

Online sales as a proportion of all retailing was 18.7% in November 2019, compared with the 19.1% reported in October 2019.

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LEGAL VICTORY - Over 6,000 firefighters are entitled to return to their pre-2015 pension schemes, an employment tribunal declared today, in a landmark victory for the Fire Brigades Union (FBU) with implications across the public sector. This comes after the Court of Appeal ruled last December that the government’s attacks on firefighter pensions constituted unlawful age discrimination.

The claimants, members of the 1992 and 2006 firefighters’ pension schemes, are now entitled to be treated as if they have remained members of their original pension scheme, with benefits including a retirement age of between 50 and 55.

In July, the government admitted it had spent £495,000 on legal costs fighting to maintain discriminatory pensions while the total annual cost of applying the ruling across the public sector could be up to £4 billion.

Matt Wrack, FBU general secretary, said:

“Last Christmas, we gave firefighters the gift of a victory in the courts. This year, firefighters can celebrate knowing that their union has secured their rightful retirement – a gift borne of solidarity that proves what unions can achieve.

“The law has now changed and our FBU claimants will be entitled to return to their previous pension schemes. Legislation will need to be amended, but there can be no delay in implementing this remedy. Firefighters were robbed, and they must now be repaid.

“To the new Tory government, let me be clear. We fought tooth and nail against your attacks on our pensions and won. If you dare to try to pay for these changes by raiding the pensions of current or future firefighters, we will come for you again – and we will win.”

In 2015, the Tory-Lib Dem government imposed a series of detrimental changes to firefighter pensions, which included a built-in “transitional protection” which kept older firefighters on better pension schemes while younger members were moved onto a new, worse pension scheme, which included a requirement to work until aged 60.

In December 2018, the Court of Appeal ruled that this transitional protection arrangement constituted age discrimination and was therefore unlawful. The government then attempted an appeal to the Supreme Court which was denied in June 2019, ending their legal challenge. They have since confirmed that the ruling will be applied across all public sector pensions.

Today’s decision is an interim declaration which will cover immediate cases, such as those who have taken ill-health retirement, with a final declaration in July. It will apply to firefighters who joined the fire and rescue service before 1 April 2012.

The declaration follows similar judgements for judges, police, and Ministry of Defence police. The FBU is the only organisation that has fought on behalf of firefighters and launched over 6,000 employment tribunal cases, organised dozens of periods of industrial action, and sent hundreds of firefighters to lobby parliament against the changes.

The FBU will now pursue compensation for injury to feelings and compensation for financial losses for claimants who lost money due to the changes.

ABC Note: 

• Under the 2015 scheme, firefighters would not be able to retire on an unreduced pension before reaching the age of 60.  A review commissioned by the coalition government agreed, that in the best case, 23% of current firefighters won’t be able to maintain the required level of fitness until 60, while in the worst case, 92% will not be able to do so. If members chose to retire early, at the former pension age of 55, firefighters in England would see their pension would be reduced by 21.8%.
• An average firefighter would have had to save at least £19,000 to make up for the detriment caused by these changes.
• The Fire Brigades Union (FBU) is the professional and democratic voice of firefighters and other workers within fire and rescue services across the UK. The general secretary is Matt Wrack

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EMPLOYMENT - The UK employment rate was estimated at 76.2%, 0.4 percentage points higher than a year earlier but little changed on the previous quarter; despite just reaching a new record high, the employment rate has been broadly flat over the last few quarters.

The UK unemployment rate was estimated at 3.8%, 0.3 percentage points lower than a year earlier but largely unchanged on the previous quarter.

The UK economic inactivity rate was estimated at 20.8%, 0.2 percentage points lower than a year earlier but largely unchanged on the previous quarter.

Estimated annual growth in average weekly earnings for employees in Great Britain slowed to 3.2% for total pay (including bonuses) and 3.5% for regular pay (excluding bonuses); the annual growth in total pay was weakened by unusually high bonus payments paid in October 2018 compared with more typical average bonus payments paid in October 2019.

In real terms (after adjusting for inflation), annual growth in total pay is estimated to be 1.5%, and annual growth in regular pay is estimated to be 1.8%.

There were an estimated 794,000 vacancies in the UK for September to November 2019; 20,000 fewer than last quarter and 59,000 fewer than a year earlier.

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NORTHERN IRELAND - The Q3 2019 Quarterly Employment Survey was published online at 9.30am this morning. The key points are:

• The number of (seasonally adjusted) employee jobs in September 2019 was estimated at a record high of 782,670. This was an increase of 4,210 jobs over the quarter and 15,540 jobs over the year. The annual change in employee jobs was statistically significant i.e. the recorded change exceeded the variability expected from a survey of this size and was likely to reflect real change. Increases were experienced in all sectors over the year, with the services sector accounting for the majority of the growth.

• The numbers of (seasonally adjusted) employee jobs in the services (635,580 jobs) and other (24,070 jobs) sectors reached the highest levels on record in September 2019.

• Private sector jobs increased over the quarter (0.7% or 4,170 jobs) and the year (2.3% or 12,900 jobs) to their highest level (573,430) on record.

• Public sector jobs increased over the quarter (0.4% or 800 jobs) and the year (1.4% or 2,920 jobs). There are now 17,600 fewer public sector jobs than the series peak in September 2009 (-7.7).

• In the last five years, employee jobs have increased by 8.3% (60,100 jobs) and by 13.2% (91,390 jobs) from the low in March 2012.

• The annualised growth rate of 1.8% in 2019 is below that seen in 2018 and 2017.

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CAREERS'S FAIR - An exhibition you should not miss if 'Europe' is of interest to you. 

POLITICO’s EU Studies and Career Fair is back for its 21st edition designed to connect top international students and young professionals with the best universities, companies and institutions.

The event is more than just a fair. It features interactive seminars, workshops and a jam- packed program of activities to empower tomorrow’s European influencers plan their educational future and career in EU studies, International Relations, Political Sciences, Business, Economics, Public Policy, Public Affairs and Law.

 The EU Studies and Career Fair – Exhibition day: Saturday, February 15 features a free to attend studies and career exhibition fair. Running from 10 AM to 4 PM, the program includes meeting with university and company representatives, seminars, workshops and networking activities. Register today.

The EU Studies and Career Fair – Introduction day (FULLY BOOKED): Friday, February 14 gathers 200 selected students and young professionals and features an exclusive visit to the EU institutions, a mentorship program with EU affairs professionals and 1-2-1 pre-arranged meetings with university representatives.

The EU Studies and Career Fair allows young adults to receive qualified guidance and first-hand information on the courses and job opportunities that will give them the extra edge in their future careers.

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EMPLOYMENT - Rory Murphy, Chair of Ensign, the UK’s only pension provider exclusively for the maritime industry, discusses the issues around employee retention in the sector and how to stop the job-hopping generation from jumping ship.

Millennials are predicted to be the largest demographic in the UK workforce by 2020. Their development and contribution are critical to the maritime industry. However, this generation changes jobs more than any other and with almost half planning to leave their current role within two years[1], it’s no surprise this cohort is known as the “job hoppers”.

Couple this with research that suggests less than a quarter of 17 and 18-year-old seafarers intend to remain at sea until retirement, and more than a third anticipate coming ashore within their first 15 years and the challenge of retaining a talented workforce becomes greater.

The recent Seafarers Happiness Index revealed employees onboard cruise ships and ferries rank amongst the unhappiest in the industry. ISWAN’s recent ‘Welfare of Superyacht Crew’ report also revealed that over 80% of crew members have experienced low crew morale whilst at work – this poses a real challenge when we know that there is a direct link between happy, engaged employees and employee retention.

Of course, poor employee retention leads to a myriad of new costs and complications for any business; additional costs of advertising, recruiting, onboarding and training of new staff, as well as decline in productivity from the outgoing team member, often also reflected in the wider team.

How can we ensure the industry evolves to create and nurture a supportive, engaging workplace environment for a generation that expects more, for employees to feel valued, in order to retain them?

Millennials are 22 times more likely to stay with a company they perceive has a high-trust culture and at a time where retaining a generation of workers has become a nationwide issue, a good benefits package can go a long way in attracting the talent the industry needs, whilst shielding the welfare of existing employees.

Ensign’s 2018 maritime pensions survey revealed that 96% of respondents believe a good company pension scheme is important and ranked pensions as the third most important factor in choosing their employer – behind only salary and annual leave.

A well-managed, high-performing pension plan, underpinned by generous employer contributions, as part of an attractive, progressive benefits package, is a great way for a company to show the value they place in their employees. Boosted employee morale and a shared sense of value and inclusivity serve to lock in the brightest and best. This all comes with the right pension plan.

Remember too, if employers are not aware of what is required to fund a meaningful retirement it could well end up leeching into employees’ well-being.

As a not-for-profit industry specific master trust, Ensign provides a low cost, high-quality pension scheme which you and your employer pay into as a way of helping you save for retirement. With members of the maritime industry at the heart of decision making, Ensign is of the highest standard and will continue to meet its members needs now, and in the future. Ensign is managed by trustees that have an excellent understanding of the specific characteristics and priorities of the maritime industry, and any income is invested directly back into delivering a high-quality scheme, not in shareholder returns. This low cost in real terms equates to an additional £27,000 being saved over a 40-year retirement savings lifespan, compared with alternative, more costly pension schemes.

In an industry that contributes £40bn to the UK economy and is responsible for moving 95% of global trade, keeping workers engaged and happy should be number one priority for the maritime industry, and an overhaul of pensions as part of a valued benefit mix must be part of this.

With needs such as connectivity at sea and better working conditions becoming more front of mind across the sector, good pension provision should also become a differentiator for employers, attracting and retaining the best employees.

For those cadets joining the industry today, the journey ahead seems a long and exciting one. But if we are truly to support maritime employees, the sector needs to step up and share ownership of the new challenge of employee recruitment and retention.

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 The Seamans Happiness Index is below:

RENUMERATION - The Minister for Employment Affairs and Social Protection, Regina Doherty T.D., has announced that she received Government approval to revise the draft Scheme of the Payment of Wages (Amendment) Bill 2019. The Scheme has been extended from the original to now include a legal right for workers to receive “on a fair, transparent and equitable basis” tips and gratuities paid by electronic means such as by debit and credit cards.

Approval has also been given to progress this Bill as quickly as possible, and to continue to oppose the progression of a Private Members Bill on the same topic, which the Government believes is fundamentally flawed and will not achieve any real advantage for workers.

Through her Bill, the Minister intends:

*             To amend the Payment of Wages Act to ensure that tips and gratuities cannot be used to ‘make-up’ or satisfy a person’s contractual wages;

*             To provide for a requirement on employers to clearly display, for the benefit of workers and customers, their policy on how tips, gratuities and service charges are distributed;

*             To provide a legal entitlement for workers to receive tips and gratuities that are paid by customers in electronic form (i.e. debit or credit cards);

*             To oblige employers to distribute electronically gifted tips to workers in their establishments in a “fair, transparent and equitable manner”.

ABC Note: There is not a strong tipping culture in Ireland but many locals and visitors tend to tip for certain services, in particular restaurants, taxis and personal services (e.g. hairdressing). A rough general guide follows. If you want to tip and are in doubt about how much, think 10%.

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IRELAND - Under Regulations signed this week by Regina Doherty, T.D., Minister for Employment Affairs and Social Protection, with effect from 1 January 2020, carers will have the opportunity to increase the number of hours they work or attend a training course outside the home from 15 to 18 ½ hours per week. 

This measure is one that Minister Doherty particularly prioritised in response to the carers she met at the Department’s Pre-Budget Forum who told her that they found the current number of 15 hours to be too restrictive.

Minister Doherty commented:

“It has been a long-standing call from carers groups and associations that the limitation we place on the number of hours that carers can work or train in a week is too restrictive.  I have had many conversations with these groups and with many individual people whom they represent and who deliver care to our most vulnerable people and loved ones. I was delighted to make provision for their proposal in Budget 2020.

These Regulations, which take effect from 1 January next, will increase the number of hours that a carer can work or train from the current 15 hours per week to 18 and a half hours per week. This will help carers address issues of social isolation and, critically, enable them to maintain better contact with the workforce, and by doing so improve their welfare and their incomes. I believe that this measure will have a positive impact on the lives of many carers, particularly women.”

There are 83,772 carers in receipt of Carers Allowance and over 3,100 carers in receipt of Carers Benefit at present.  Over 75 per cent of carers receiving Carer’s Allowance are women.

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HOMELESSNESS - Plymouth mansion is to become emergency homeless shelter as welfare cuts blamed for rise in rough sleeping.

The former home of the Commander-in-Chief of Plymouth could become a winter night shelter for up to 12 homeless people.

Welfare cuts are causing a sharp rise in homelessness and this initiative could prevent loss of life during the winter months.

Image: Charles Lennox, 4th Duke of Richmond was killed by a Fox ironically. 

The large grade two listed building at Mount Wise - built in 1795 for the Duke of Richmond.

The building is owned by the charity Hamoaze House, which has helped thousands of addicts and their loved-ones, deal with the health and welfare fall-out of drug and alcohol dependency.

Occupants will be aged 18+ and will have a local connection to Plymouth.

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